Banks will keep excess reserves when
A. they do not foresee profitable opportunities to make loans.
B. business conditions generally are depressed.
C. they do not foresee opportunities to make secure loans.
D. All of these responses are correct.
Answer: D
You might also like to view...
An increase in labor productivity will shift
A) MRP curve to the left. B) MFC curve to the right. C) MRP curve to the right. D) MFC curve to the left.
To some economists, the "Great moderation" means:
a. a small change in real wages. b. a low inflation rate. c. a low unemployment rate. d. low output growth variability. e. low money supply growth.
How much does the money supply change if the reserve requirement rate is 20% and excess reserves are $5 million?
a. $50 million b. $1 million c. $10 million d. $25 million
Which of the following statements most accurately describes the relationship between the nominal and real interest rates?
a. The real interest rate is the expected inflation rate plus the nominal interest rate. b. The real interest rate is the expected inflation rate minus the nominal interest rate. c. The real interest rate is the nominal interest rate minus the expected inflation rate. d. The real interest rate is the nominal interest rate multiplied by the expected inflation rate. e. None of the above statements is accurate.